It's hard to say no, especially to someone you work with everyday. So find a way to arrive at a "yes" that benefits both the company and the employee. Fortunat

It's hard to say no, especially to someone you work with everyday. So find a way to arrive at a "yes" that benefits both the company and the employee. Fortunately you have several factors in your favor, and potential strategies to getting to "yes". 1) It's A Startup - resources are scarcer than a larger, more established company. Any employee who works at a startup should understand this. 2) No Process - there's no formal process for handing out promotions. Co-opt his self-interest to craft a process that treats employees and the company fairly. As a side benefit this will force him to think of the company's needs in addition to his own. 3) It's A Startup Redux - working for a startup often means sacrificing short-term gains for a long-term payoff. Structure any promotion so that while an employee may not get as much now they have an opportunity to earn much more in the future. (Usually, this comes in the form of stock options with a vesting cliff). 4) DIY - in a startup the best way to get a promotion is to build it yourself. A single Google worker is unlikely to move the needle on Google's profitability, either up or down. A startup employee can have a much greater impact. Inventing or improving a feature. Helping expand into a new market. Creating a process that saves every other employee an hour each day. These are all huge gains that can improve profits, either presently or down the road. Find the metrics to measure each employee's contributions and reward them appropriately.